Norinchukin bank’s massive holdings of collateralised loan obligations ties deposits of Japan’s agricultural businesses to health of American companies. But it remains committed to staying in the market. “The market has moved away from its reliance on Japanese anchor Triple A investors,” a London-based CLO investor said. By Hugh Minch. The privately held bank’s $62 billion CLO portfolio is larger than either of the two biggest U.S. bank buyers, Wells Fargo & Co. and JPMorgan Chase & Co. And its influence is growing: Norinchukin added about $10 billion to its holdings in the last three months of 2018, nearly a third of all U.S. and European CLO issuance over that period. At the time Norinchukin said it would pause making new investments as it re-evaluated its holdings. Norinchukin Bank held ¥7.7 trillion ($71 billion) in CLOs at the end of March, whileMitsubishi UFJ Financial Group Inc. held ¥2.3 trillion and Japan Post Bank Co. had ¥1.8 trillion. Norinchukin’s CLO holdings increased again last quarter, with the bank’s exposure to the asset class standing at JPY 6.8 trillion ($62.2 billion) on 31 December Its CLOs in the U.S. and Europe make up some 7% of … Despite Norinchukin’s reduced activity, the U.S. CLO market has been solid for most of 2019. A Norinchukin spokesman said the bank held a Yen130 billion ($1.24 billion) unrealized loss on its CLO portfolio at the end of June, down from the $3.7 billion March-end figure it disclosed in May. Norinchukin Bank: Key Facts and Statistics - Q1 June 2020. Norinchukin Bank held ¥7.7 trillion ($71 billion) in CLOs at the end of March, while Mitsubishi UFJ Financial Group Inc. held ¥2.3 trillion and Japan Post Bank Co. had ¥1.8 trillion. Other big buyers include Wells Fargo & Co. and JPMorgan Chase & Co., which each owned about $30 billion worth of CLOs at the end of the first quarter. One fairly small bank alone, Norinchukin Bank (farming and fishing) holds about $70 billion of CLOs. In the last nine months of 2018, Norinchukin increased its CLO investments by almost 80%. Amid heightened scrutiny in the Japanese CLO market in April 2019, Japan’s largest buyer of CLOs –Norinchukin Bank, took a break from their purchasing, but has since started buying CLOs again. Norinchukin Bank owns about 10% of the $700 billion market for corporate debt that was packaged into securities called collateralized loan obligations. Norinchukin Bank owns about 10% of the $700 billion market for corporate debt that was packaged into securities called collateralized loan obligations. Norinchukin Bank The Info: Size ($ in 1000's) At 06/30/2020: $5,860,253 At 03/31/2020: $5,121,698 Combined Holding Report Includes: Norinchukin Bank The Norinchukin Zenkyoren Asset Management Co. … But when other institutions quickly stepped in to snap up the AAA tranches Norinchukin had been greedily consuming, it only served to underline the continuing attractiveness of CLOs. Due to their “expertise” in the space, the likes of KKR sell the product (the CLO) and earn fees as CLO managers. Norinchukin Bank, starved of yields thanks to Japan’s negative interest rates, is expected to keep buying AAA-rated tranches in Europe until at least the summer, even as Japanese authorities scrutinise how the region’s financial institutions operate in the global CLO market. At the time Norinchukin said it would pause making new investments as it re-evaluated its holdings. Japanese banks now own about 15 percent of outstanding collateralized … Norinchukin Bank’s CLO portfolio grew another 8% in the second quarter to JPY 8 trillion ($74.12 billion) by 30 June, according to the bank… Securitization investors and traders have told GlobalCapital that CLO anchor investor Norinchukin Bank has taken a step back from both the US and European markets. Norinchukin Bank, a cooperative lender to the agricultural, forestry and fishing sectors in Japan, held an extraordinary ¥8 trillion of CLO investments in June this year. Some took the flight from the market by Japan’s Norinchukin Bank last year, following a mild warning about the market from the country’s central bank, as a sign that all was not well. Lawyers from Conyers, an international offshore firm, provided an update on the Japanese Risk Retention Rule that focused on the effect on CLOs. Moody's Investors Service 29 Jul 2020 Credit Opinion Norinchukin Bank: Update to credit analysis. A building used by Norinchukin Bank is seen in Chiyoda Ward, Tokyo, in 2015. Japan Post Bank is another big buyer, with ¥1.52 trillion CLO holdings at September 30. There is another twist to this story. The firm has been noted as the biggest buyer of CLO paper. But it remains committed to staying in the market. Norinchukin increases CLO holdings to $62 billion. There tends to be a lag between when banks agree CLO deals and book them. Norinchukin Bank, a cooperative for farmers and fishermen, has notably built a global portfolio of $68 billion (¥7.4 trillion) in CLO paper, up from $62.6 billion (¥6.8 trillion) at the end of 2018 and $35 billion (¥3.8 trillion) a year earlier. But what has been reported in the US media is that banks in Japan hold about $140 billion or so of US CLOs. Citibank. Other big buyers include Wells Fargo & Co. and JPMorgan Chase & Co., which each owned about $30 billion worth of CLOs at the end of the first quarter. By Hugh Minch. But managers and arrangers across the market say the agricultural lender plans to hike the interest it seeks on the debt by 3 to 4 basis points for future deals in both Europe and the U.S. But during the third quarter, the firm's CLO holding dipped slightly. Nochu's CLO holdings up 8% in Q2 while JP Morgan buys even faster. I don’t read the industry or bank data for Japanese banks, in part because I can’t read Japanese, and that’s where the good stuff is. At a time of negative government bond yields at home, Japanese banks have been enthusiastic purchasers of US and European CLOs, with agricultural lender Norinchukin Bank alone amassing 7.9 trillion yen (S$97.93 billion) of the assets. Tuesday, February 05, 2019. (Bloomberg) -- One of the world’s biggest buyers of collateralized loan obligations faces increased scrutiny from Japan’s financial regulator, which is concerned about the rapid buildup of CLO holdings on bank balance sheets. Norinchukin Bank has put the brakes on a planned return to the European CLO market, opting to take a cautious approach after the UK voted to quit the European Union. Japan's Biggest CLO Buyer Taps the Brakes. Flowering market: The Norinchukin Bank, which serves Japans agricultural and fishing collectives, has been taking ever bigger slices of the international CLO market. In fiscal 2019, the Bank launched a local subsidiary, Norinchukin Bank Europe N.V., in the Netherlands, where continuing growth is expected as a source of profitability both in financial and non-financial businesses in Europe, which is experiencing significant changes due to Brexit and other issues. A Norinchukin spokesman said the bank held a Yen130 billion ($1.24 billion) unrealized loss on its CLO portfolio at the end of June, down from the $3.7 billion March-end figure it disclosed in May. Norinchukin Bank, Japan’s largest agricultural lender. According to several news reports (one here from Bloomberg), Norinchukin Bank has leveled off its CLO buying in recent months. During the lead up to the 2008 banking crisis a trigger point was a … Wells Fargo, JP Morgan, and Citi are the largest bank owners of CLOs. Japan’s Norinchukin Bank has been the biggest buyer of the top-rated tranche of European CLOs this year and has invested at a spread 6 basis points lower than the broader buyer base. Tuesday, August 06, 2019. In the last nine months of 2018, Norinchukin Bank increased its CLO holdings by almost 80%. That number has probably since risen, given that agricultural lender Norinchukin Bank alone had 8 trillion yen ($75 billion) of the instruments in June. Analysts have also turned to a Bank of England report, which last year contained a table suggesting Japanese banks held about 10% of the $750 billion global CLO market in 2017. The bank later cut back purchases in the U.S. and Europe in the second quarter, Bloomberg has reported. Add in Japanese mega-buyer Norinchukin Bank's return after a dramatic second quarter pullback, and industry veterans see a battle brewing for the top-rated CLO tranches. 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